When it comes to saving for college, it pays big to start early
When a friend recently came into an unexpected windfall, he didn't book a cruise or buy a lake house.
"Our goal," he told me, echoing a dream many parents have, "is to get our son through college without debt."
That goal, however, can fuel a lot of anxiety for parents who have weathered recent recessions and market fluctuations. Especially because financial windfalls are rare and winning the lottery just ain't happening for most of us.
According to The Institute for College Access & Success, average student loan debt in Wisconsin was $29,569. While that can seem like a daunting number, if you start early, you'll have time on your side when it comes to saving for college.
For example, I opened an Edvest college savings account for my children right after they were born.
EdVest offers 17 savings options and unlike a low-dividend bank savings account, these are investment portfolios, which means that just like socking money away in a 401k or the stock market, you should see growth over time and, again, if you get in early, you'll have well over a dozen years to grow your investment before junior heads off to college, leaving you a weeping mess on your doorstep.
And, after all, what is college if not an investment?
It's an investment in your child's future, as many careers require at least some college degree, whether it be a four-year college, advanced degrees, technical college or other educational institutions. Edvest funds can be used for any of these, as well as for room and board, computers, book and other related education expenses.
If one kid decides to move to Europe and make wine instead of going to college, I can shift the funds to another beneficiary in my family.
To make sure we stay on track in our savings, I have a set amount deducted from each paycheck and directly deposited into the kids' Edvest 529 accounts.
That also gives me a tax benefit, because eligible folks can deduct up to $3,280 in Edvest contributions from their Wisconsin state income tax. This is available to grandparents who contribute, too. Hint, hint, grandma.
Parents and grandparents aren't the only ones who can contribute, either. These days, some Wisconsin employers offer Edvest contributions as part of their benefits packages.
For more information or to open an Edvest account, go to Edvest.com or call (888) 338-3789 to talk to a college savings specialists weekdays from 7 a.m. to 7 p.m.
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